Can gambling losses be deducted from 1099-MISC?Posted by Catman88 on 1/29/13 at 7:26 am

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The IRS says that Cash and Trips count. But I didnt get a 1099-G for my wife winning 4 plane tickets to the carribean (they valued at 4001). They sent a 1099-MISC. So Im not sure how that will work thats a trip we won. I would think I would be able to deduct anything I lost but not sure if the lack of -G will be problematic. Since it was won through a radio station and not a casino does that not count?

re: Can gambling losses be deducted from 1099-MISC?Posted by Catman88 on 1/29/13 at 7:48 am to yellowfin

My wife entered via email so yea not gambling. Also looking into the BS amount of 4001 for 4 tickets. The cost if I were to book today would be 2327.60 for the 4 tickets we used. So looking at putting an adjustment of FMV of -1672.40 with 2 used for a trip to St Thomas/St John and 2 for a trip to Nassau. Im not sure where in the Carribean you would pay 1000.25 per person to fly to. I did print out the booking data from delta.

These were economy tickets only. Didnt have the option to book another category. What is crazy is that they valued them at 4k but they dont bother take into account that we literally had 2 days only to book. They were giving away tickets that were purchased on points that were expiring on a friday and they awarded them on a Wed.

re: Can gambling losses be deducted from 1099-MISC?Posted by Catman88 on 1/29/13 at 11:09 am to iAmBatman

Well I understand that. The question was if a prize of this matter counted as "winnings" or if it had to be specific to gambling and putting money at risk.

If I had 25k in gambling losses and won a 25k MSRP car in a drawing vs 25k in gambling losses and won a 25k MSRP car at the casino slot.

Seems to be that they are not treated equally. In one case I would get to duduct but in the other case I would be stuck with the 25k income. At which I could claim FMV of the car as being around 19k instead of 25k.

re: Can gambling losses be deducted from 1099-MISC?Posted by iAmBatman on 1/29/13 at 11:26 am to Catman88

quote:If I had 25k in gambling losses and won a 25k MSRP car in a drawing vs 25k in gambling losses and won a 25k MSRP car at the casino slot.

I see what you're saying and I'm not exactly sure what the IRS uses as the definition of "gambling." To me, it would seem that if you paid for a chance to win something, then that would be gambling. There is also the issue of people doing those sort of raffles as a charity (like St. Jude Dream Home) and then writing off the cost of the ticket as a donation. I really don't know all the ends and outs but I'm sure Poodlebrain could fill in the gaps.

Prizes and awards. If you win a prize in a lucky number drawing, television or radio quiz program, beauty contest, or other event, you must include it in your income. For example, if you win a $50 prize in a photography contest, you must report this income on Form 1040, line 21. If you refuse to accept a prize, do not in­clude its value in your income. Prizes and awards in goods or services must be included in your income at their fair market value.

I think the bolded part gives you your answer - the instructions are telling you to report it on a different line than where you would report gambling losses. So I don't think you can offset.

re: Can gambling losses be deducted from 1099-MISC?Posted by Catman88 on 1/29/13 at 12:23 pm to LSUchuck

Well IRS does say that prizes are subject to FMV.

I also had to pay the international taxes to fly to Nassau. That is normally included in the ticket price. So Im guessing I could reduce the winnings by the 95 dollars per ticket I incured there as well since I have that documented. Likely I will just keep my printout of the real cost and use that to determine FMV.

re: Can gambling losses be deducted from 1099-MISC?Posted by Newbomb Turk on 1/30/13 at 8:42 am to Catman88

You do not have to claim the full MSRP on your winnings. If you can document that you could have (or did) gotten the prize for a lot less, you need only claim that amount. So, if you won a car with an MSRP of $25K, but you can get a statement from a dealer that they sold that same car with the same options for $21K, that's all you need to claim.

You really should get contemporaneous documentation, however, as claiming something less than what is shown on the 1099 just might invite an audit. However, if you don't want to risk an audit (because you may have other "iffy" items on your return), there is a method by which you can call the IRS and file a Form 4598 to get the prize company to issue a corrected 1099.

As far as deducting losses, you're out of luck. The IRS takes the position that sweepstakes type winning (where you don't really have to do anything but enter -- i.e., you're not putting up any of your money to get a chance to "win") are not considered "gambling winnings" and therefore cannot be offset by gambling losses.

re: Can gambling losses be deducted from 1099-MISC?Posted by Catman88 on 1/30/13 at 10:26 am to Newbomb Turk

Yea I dont have anything fishy on my return. Pretty standard return. Have all documentation. Would rather not pay 400 extra in taxes because they pulled a number out of thin air. 4 tickets 1k each. How fricking lazy was that.